Bill's Boycott of Exxon Is Misinformed and Illogical
So Bill O'Reilly has called for a mini boycott of gas (Thursday's Talking Points Memo), and has noted that he is personally boycotting ExxonMobil in light of Lee Raymond's compensation. First, the gas boycott is hardly worth a stir, most people rationally follow their economic self-interest and react to price signals by consuming less, they don't need a humble news correspondent to instruct them in such affairs.
While all have a right to our opinions, the boycott of ExxonMobil is less justified and Bill's underhanded call for it, by mentioning his personal boycott, is misguided. First, I think he has his facts wrong. He mentioned a $700 million payout to Raymond. I don't know where he got that number. The number widely reported in the press was around $400 million, but even that number is irrelevant, as this analysis by an expert compensation analyst points out. As Crystal points out, much of this figure relates to compensation that was earned over a long period of time, some over 43 years of Raymond's tenure at Exxon and some over his 12 year run as CEO. As I mentioned here, modest numbers can get pretty darn big when you compound them over many years. Bill seems not to understand the power of compounding, nor appreciate that by effectively putting his money back into the company Raymond was aligning his interests with that of shareholders. Shareholders LOVE this. This is what shareholders want to see, as opposed to the egregious, no risk pay packages that many lesser executives manage to extract from their Boards of Directors. Additionally, Bill fails to understand that Raymond's compensation is a tiny fraction of the overall wealth he has created for shareholders, and they are happy to give it to him given the performance of the company.
Finally, I hope that Bill pauses to think one of these days about what he wants for America. In the area of global business competitiveness, does he want America to be a leader? Does he want American business run like Exxon or does he want it run like General Motors? Does he want management that builds a perennial leader or one that hemorrhages jobs and foists billions of pension liabilities off on the government for taxpayers to pay for? It is a pretty clear choice and I might humbly suggest to Bill that you have to pay well to get one over the other, and what you do pay is meaningless compared to the price of corporate mismanagement, ala General Motors. This is the economic equivalent of the saying "if you think education is expensive, try ignorance." Do we really want to punish companies for their ability to unleash the skill of a Lee Raymond and then simply hope that we don't get hundreds more disasters like General Motors? Not a chance in my opinion, I'll gladly pay for excellence. Lee Raymond and Exxon are examples of the system working. And that's the memo.
While all have a right to our opinions, the boycott of ExxonMobil is less justified and Bill's underhanded call for it, by mentioning his personal boycott, is misguided. First, I think he has his facts wrong. He mentioned a $700 million payout to Raymond. I don't know where he got that number. The number widely reported in the press was around $400 million, but even that number is irrelevant, as this analysis by an expert compensation analyst points out. As Crystal points out, much of this figure relates to compensation that was earned over a long period of time, some over 43 years of Raymond's tenure at Exxon and some over his 12 year run as CEO. As I mentioned here, modest numbers can get pretty darn big when you compound them over many years. Bill seems not to understand the power of compounding, nor appreciate that by effectively putting his money back into the company Raymond was aligning his interests with that of shareholders. Shareholders LOVE this. This is what shareholders want to see, as opposed to the egregious, no risk pay packages that many lesser executives manage to extract from their Boards of Directors. Additionally, Bill fails to understand that Raymond's compensation is a tiny fraction of the overall wealth he has created for shareholders, and they are happy to give it to him given the performance of the company.
Finally, I hope that Bill pauses to think one of these days about what he wants for America. In the area of global business competitiveness, does he want America to be a leader? Does he want American business run like Exxon or does he want it run like General Motors? Does he want management that builds a perennial leader or one that hemorrhages jobs and foists billions of pension liabilities off on the government for taxpayers to pay for? It is a pretty clear choice and I might humbly suggest to Bill that you have to pay well to get one over the other, and what you do pay is meaningless compared to the price of corporate mismanagement, ala General Motors. This is the economic equivalent of the saying "if you think education is expensive, try ignorance." Do we really want to punish companies for their ability to unleash the skill of a Lee Raymond and then simply hope that we don't get hundreds more disasters like General Motors? Not a chance in my opinion, I'll gladly pay for excellence. Lee Raymond and Exxon are examples of the system working. And that's the memo.
posted by Donny Baseball at 10:07 AM
2 Comments:
I generally give BO a pass on the annoyance issue because he is a much needed alternative to the traditional media worldview. A flawed alternative, but an alternative nonetheless. I think that power has corrupted him a bit, he was far less strident and 'shoot from the hip' when his audience was still small.
funny, a buddy of mine worked for JS and left to go work for BO. better on the resume.
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